February 25, 2006

 

CBOT Corn Review on Friday: Up on spec buys, exports, outside Mkts

 

 

Corn futures on the Chicago Board of Trade ended firm Friday, rallying near six-month highs on speculative buying amid supportive export demand and momentum from outside markets.

 

CBOT March corn finished 4 3/4 cents higher at US$2.27 3/4, and May ended 5 cents lower at US$2.38 3/4 per bushel. For the week, March corn was up 1 1/4 cent and May corn gained 1 1/2 cent.

 

The compelling story on friday was fund buying, with supportive weekly export sales and strong crude oil and metals markets laying the ground work for the gains, said a CBOT commission house broker.

 

The market extended the overnight theme, taking a supportive stance right out of the starting blocks with speculative buying a featured attraction. A continuation of strong weekly export sales data provided fundamental support to keep buyers enthused.

 

The market's gains accelerated once May futures eclipsed overhead resistance at February highs. Pre-placed buy orders extended the advances, with speculative and local buying carrying futures to session highs down the stretch.

 

Otherwise, talk of China suspending corn exports at the end of February provided a psychological boost amid the recent surge in weekly export sales and declining crop estimates for Argentina, traders added.

 

The U.S. Department of Agriculture said 2005-06 corn weekly export sales totaled 1,490,500 metric tonnes, 25% above the previous week but 6% below the prior four-week average. 2006-07 marketing year sales were 72,000 metric tonnes. Trader expectations ranged from 900,000 to 1,200,000 tonnes.

 

In news, China could suspend corn shipments from March, if the government doesn't extend an export quota expiring Feb. 28, local traders said Friday. Corn exports, except for those already contracted, will be suspended if the government doesn't announce an extension or new quotas by Tuesday, officials said.

 

DTN Meteorlogix said a new round of thundershowers moves into the southern sunflower belt of Argentina on Sunday night and north into corn and soybean areas Monday night and Tuesday.

 

In pit trades, Calyon Financial bought 600 May, JP Morgan bought 700 May, Citigroup bought 1,500 May, Man Financial bought 1,300 December, RJ O'Brien bought 600 May, and UBS Securities bought 500 March. On the sell side, Fimat sold 500 March, O'Connor sold 600 May, RJ O'Brien sold 700 March and USA Trading sold 1,500 March. Commodity fund buying was estimated near 6,000 contracts.

 

Ethanol futures ended mixed, with the March future settling 2 cents higher at US$2.48 and the October futures ending 3 1/2 cents lower at US$2.08 per gallon.

 

Oat futures ended mostly higher, with the liquidation of March positions remaining a featured attraction. CBOT March oat futures settled 1/2 cent higher at US$1.89 1/2 and May oats ended 1/4 cent lower at US$1.94 3/4 per bushel.